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What is a Lease Purchase?

By
Real Estate Agent with Kear Realty, Inc.

What is a lease purchase?  A lease purchase is a way to purchase a home with the assistance of a seller.  It is sometimes called owner financing or a land contract.  The seller requests money or a down payment on their home for the option to purchase their property, a sales price is negotiated, and the buyer signs a lease purchase.  The seller can no longer market the home for sale.  Before that lease expires, the buyer moves forward to secure financing and buy the home.  The initial down payment will go towards the purchase price, and even a portion of the monthly rent may be negotiated to be given back as credit toward the home or down payment.  The risk to the buyer is that if he is not able or willing to convert to purchasing the home at the end of the contract, all monies are forfeited.  This less then traditional way of buying and selling a home is getting more and more common in today's market.  If you are considering a lease purchase, be sure to have a legally binding lease purchase contract and use the assistance of a real estate agent to help you negotiate the sale, or market your listing properly. 

 

Posted by

Denise Pudim 

Serving Ross, Pike, Highland and Jackson County Ohio

Visit Chillicothe homes for sale to view more listings in these areas.

Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Yeah, in TEXAS only a fool negotiates this without the assistance of a REAL ESTATE attorney. Our lease contracts and purchase contracts do not work as 1. TREC and TAR frow heavily on any practitioner that attempts to navigate this with a client. Great post!

Aug 23, 2010 11:12 AM
Sandy Wagner
RE/MAX Professionals 253.225.8322 - Gig Harbor, WA
Short Sale Specialist Tacoma, WA, and Gig Harbor,

You're right....it's getting more common in this market. We should take classes on lease purchase as they can be really difficult.....I'm working on one right now (representing the Seller).

Aug 23, 2010 11:25 AM